INSIGHT: The Gupta empire is crumbling

JOHANNESBURG - For years, the brothers Ajay, Atul and Rajesh Gupta were ranked among South Africa’s most prominent businessmen and socializsd with the ruling elite, including their friend, then-President Jacob Zuma.

They weathered accusations that they’d exploited their political connections to land an aircraft at a high-security military base to ferry guests to a private wedding, installed their allies in key positions at state companies, tried to influence cabinet appointments and looted billions of rand of taxpayer funds.

Law enforcement agencies took no visible action against them, saying only that investigations were ongoing.

That all changed on Feb. 14, when Zuma quit as president under pressure from the ruling African National Congress the same day the police’s Hawks investigative unit staged a dawn raid on the Guptas’ sprawling luxury estate in Johannesburg’s Saxonwold suburb. Some of their top lieutenants were arrested and the eldest brother, Ajay, was declared a fugitive.

The timing of the two events was no coincidence, according to Mark Swilling, a professor at Stellenbosch University who convened an academics’ study last year that concluded that the Zumas, the Guptas and their allies had orchestrated “a silent coup.”

“There is a multi-pronged attack on the Zuma-Gupta network,” Swilling said. “One of these was a political attack launched from within the ANC to get rid of Zuma as the linchpin of that power elite. Linked to that is another set of actions initiated by the criminal justice system to nail the Guptas.”

Business Empire

The Guptas arrived in South Africa from India in the early 1990s and built up a business empire with interests ranging from mining to pay television. They acquired a private jet and mansions from Cape Town to Dubai. Their business partners included Zuma’s son, Duduzane, and they employed one of his four wives.

The Guptas became household names in South Africa in 2013 when they secured access to the Waterkloof airforce base for their wedding guests. Their notoriety grew in 2016, when then-Deputy Finance Minister Mcebisi Jonas said the brothers had offered to make him finance minister at a meeting arranged by Duduzane in exchange for business concessions. Zuma and the Guptas denied any wrongdoing.

Then in June last year the amaBhungane Centre for Investigative Journalism and the Daily Maverick website’s Scorpio unit unveiled the so-called Gupta Leaks -- a trove of more than 1 million electronic documents. They allegedly contained emailed exchanges between the Guptas and their most trusted allies, lists of people who were invited to their parties, supplier agreements, documents detailing the laundering of money between their scores of companies and details of favors made to politicians.

‘Tipping Point’

“The Gupta Leaks was the tipping point,” said Ben Theron, the chief operating officer of Johannesburg-based civil society group, the Organisation Undoing Tax Abuse. “It shone a bright light on the exact nature and extent of the involvement of the Gupta family and their associates and all the government officials involved. The population was given a crash course in democracy, legal systems, the economy, state-owned companies and how safeguards failed us.”

Despite seemingly having ample material for a damning indictment, the authorities waited until the ANC decided Zuma should be replaced by his deputy, Cyril Ramaphosa, who had won control of the party in December after campaigning on an anti-corruption ticket.

The Hawks began by arresting suspects implicated in siphoning off more than 200 million rand ($17 million) from a state-funded dairy farm to Gupta-controlled accounts. Five acting and former chief executives of Gupta-controlled companies were among eight people charged and released on bail.

Read more here about the dairy farm that blew open investigations into corruption

In an affidavit dated Feb. 8 and signed in Dubai, Atul Gupta accused prosecutors of wrongly alleging that 10 million rand was diverted to him from the dairy project and asked for a court order they obtained to freeze his bank accounts and other assets to be overturned.

The National Director of Public Prosecutions “misled the court in respect of the evidence supporting the granting of the order,” he wrote. “I deny I have received 10 million rand as alleged.”

The Hawks said Ajay Gupta had failed to turn himself in with regard to a separate probe and “is now regarded as fugitive.” He was seen departing South Africa for Dubai on Feb. 6. There have been no reported sightings of Rajesh Gupta. South Africa said it will work with Interpol and other governments to ensure all those implicated in wrongdoing are brought to justice.

It remains to be seen if the Guptas will be extradited or if some of the looted funds can be recouped according to Iraj Abedian, head of Pan-African Investments and Research Services, an associate of New York-based Global Source Partners Inc., who has advised the South African government on economic policy.

“It is going to be very hard and painful to right all the wrongs,” Abedian said. “Litigation takes time, wheels of justice turn so slowly, and when peppered with political issues, then the wheels move even slower.”